Moody’s to Introduce a Scoring System for Stablecoins

Audy Castañeda
-
0
<strong>Moody’s to Introduce a Scoring System for Stablecoins</strong>

The system would assess the quality of the stablecoin issuer’s reserve certification.

Major financial institution Moody’s Corporation is reportedly working on a scoring system for up to 20 stablecoins, assessing the quality of their reserve attestation, Bloomberg informed on January 26th.

Bloomberg, citing a person familiar with the matter, reported that the scoring system is still in its early stages and will not represent an official credit rating.

Stablecoins are one of the most popular asset classes within the cryptocurrency industry. Typically, the value of the digital asset is pegged to a national fiat currency such as the US dollar, or another financial instrument such as gold.

As the name implies, stablecoins are expected to be less volatile than other types of cryptocurrencies.

Stablecoins as Quality Reserves

Following the collapse of Terra’s algorithmic stablecoin TerraUSD in 2022, stablecoin issuers have faced renewed attention from financial regulators on the quality of their reserves.

A report from the International Monetary Fund, “Regulating the Crypto Ecosystem: The Case of Stablecoins and Arrangements”, highlighted the importance of a high-quality, liquid stablecoin pool. According to the research results, stablecoins with quality reserves have the potential to become a stable source of value. These assets have the potential to “become a widely accepted and credible medium of exchange.”

According to the report, “Appropriate regulation would vary depending on the stablecoin’s structural features and usage and ultimately its risks.”

On top of that, US financial regulators have highlighted the dangers of an unregulated stablecoin. Acting President of the Federal Deposit Insurance Corporation (FDIC), Martin Gruenberg, advised that stablecoin issuers should be subject to strict regulatory measures.

Gruenberg further noted that “it is important for the FDIC and the other Federal banking agencies to approach crypto–assets and crypto–asset–related activities thoughtfully.” He acknowledged that crypto assets risks as “novel and complex.” Therefore, he claims that a significant amount of time is required in order to assess such risks, as well as dialogue with multiple stakeholders.

Gruenberg’s view was corroborated by the IMF, which stated that “stablecoin issuers should be subject to strict prudential requirements.”

Meanwhile, the largest stablecoin in the industry, Tether USDT, has been facing increased pressure from the community and regulators over its opaque reserves.

In 2021, Tether USDT settled with the New York Attorney General’s office for misrepresenting its endorsement. The firm also witnessed a small bank run due to the collapse of Terra, processing approximately $10 billion in withdrawals.

Adoption Grows

Despite increased scrutiny of the asset class, its adoption rate has grown around the world. BeinCrypto reported that Tether processed $18.2 trillion in transactions in 2022, ahead of traditional payment processors like Visa and Mastercard.

Various media reports have also revealed how citizens in struggling economies rely on the asset for their savings and transactions.

By Audy Castaneda

Important Issues for Bitcoin and Cryptocurrencies this Week

Audy Castañeda
-
0
<strong>Important Issues for Bitcoin and Cryptocurrencies this Week</strong>

Bitcoin price reached a new monthly high of $23,966 last night.

Fueled by the continued recovery of the US Nasdaq tech index, Bitcoin (BTC) and, above all, the altcoin sector, showed their bullish side in the past week. Strong sales numbers from automaker Tesla, coupled with better-than-expected US economic data, had a positive effect on the stock and crypto markets in the second half of the week. In particular, incoming orders for durable goods coupled with a strong real estate market were able to convince investors.

Earnings Season in the US is Coming to its Peak

This week, some of the biggest US tech companies release new company figures for the last quarter of Christmas. In addition to social media giant Meta, formerly Facebook, on Wednesday, investors are mainly looking at the results and outlook for Apple, Amazon, and Google parent Alphabet.

It’s hard to know whether these four tech giants can meet their sales and profit expectations. Meta and Alphabet have recently suffered from declining demand for online advertising. At Alphabet and Amazon, much like Microsoft in the previous week, lame driving force cloud storage, quarterly numbers, and especially the outlook for the next few business quarters could be shattered.

Although this area should continue to represent the source of income for these companies and generate a significant part of quarterly earnings, this sector could grow less strongly in 2023 than analysts expected.

US Consumer Confidence Figures

On Tuesday, January 31st, the Conference Board (CB) will publish new figures on US consumer confidence for the trading month of December. The degree of optimism about economic development in the US had again risen significantly to 108.3, contrary to forecasts.

For January, analysts expect more optimism among consumers and expect 109.0. If this value is reached or even exceeded, the US dollar index (DXY) is likely to recover from its current weakness in the short term, which could have a negative impact on price developments in the crypto market.

On the other hand, if the analysts’ expectations are not met, this will again have a negative effect on the strength of the US dollar, which in turn would be positive for the prices of Bitcoin and other cryptos.

US Jobs Report at the End of the Week

On Friday, February 3rd, the US Non-Farm Payrolls for January will be released. Experts expect a drop to 183,000 employees. Therefore, the forecast is well below the most recently released employment figures from December.

If market experts get their January forecast right, and the non-farm labor market cools noticeably, the probability of an impending recession should increase again in the coming months.

If the labor market remains resilient as in previous months and is above expectations, this does not necessarily have to lead to a correction in the stock and crypto markets. After the release of the last robust numbers at the beginning of the year, the stock and crypto markets trended north in lockstep.

By Audy Castaneda

Ripple (XRP) Forecast for February 2023

Audy Castañeda
-
0
<strong>Ripple (XRP) Forecast for February 2023</strong>

How could the XRP price move in the coming weeks, and what is the XRP forecast for February?

The Ripple network’s XRP coin has been one of the most interesting, but also one of the most controversial coins in the crypto market for some time. Above all, the legal dispute with the US Securities and Exchange Commission (SEC) is weighing on investor confidence in the project.

The XRP price has seen a sharp rise in recent weeks, and like many other altcoins, it was able to benefit from Bitcoin’s rise in January. The XRP price has risen from $0.34 to $0.41 in the last 4 weeks. While this increase was significant, it was not as strong as the price increases of most other altcoins.

The XRP price moved almost sideways in the first days of the new year. Midway through the month, the price could experience a strong increase. After stabilizing in the days that followed, there was another rally above $0.40 last week. For a few days it has only been on the side.

Why Could the XRP Price Increase So Little?

If the price development of Ripple’s XRP coin is compared to other major altcoin price developments, the price of XRP could not show a significant increase. This could be because many investors doubt that the XRP coin can continue to maintain its price in the future.

Due to the legal dispute with the US Securities and Exchange Commission, it is difficult to gauge how the course will unfold in the coming months. If Ripple is guilty of illegal securities trading, this could lead to an implosion in the XRP price.

What is the Ripple (XRP) Forecast for February 2023?

At the moment it is difficult to say in which direction the market will move in the coming weeks, because, in the last few days, prices have stabilized and there have been stronger sideways movements. In the last few hours, though, the Bitcoin price has been able to rally again, which could favor a good Ripple (XRP) forecast for February.

There are two scenarios for the Ripple (XRP) forecast, outlined below.

First scenario: The market continues to rise in February. In this case, the Ripple Forecast (XRP) at $0.45-$0.55 will stand.

Second scenario: there is another stronger crypto market crash in the coming weeks. In this case, the XRP course could see a drop again. one Ripple (XRP) forecast of $0.25 to $0.35 is assumed to come out in February.

XRP has become a very risky cryptocurrency as a result of the legal dispute with the SEC. A guilty verdict would greatly damage confidence in Ripple, and could cause the XRP course to implode. Therefore, the course is difficult to predict. The Ripple (XRP) forecast shows that the market may go in different directions in the coming weeks.

In conclusion, the XRP coin should be seen as a speculative investment for the next few weeks.

By Audy Castaneda

Bitcoin Industry: The Greenest in the World

Audy Castañeda
-
0
<strong>Bitcoin Industry: The Greenest in the World</strong>

The Bitcoin Mining Council has released its latest quarterly report, providing a 2022 update.

It seems that securing the Bitcoin network requires an insignificant amount of energy, just 0.17% of the energy generated worldwide.

The ecological impact is even more trivial since Bitcoin is only responsible for 0.11% of CO2 emissions. That is 11% of the 1% out of the 34.8 billion tons of CO2 emitted each year by humanity.

More and more energy companies are joining forces with mining companies, with the specific aim of extinguishing methane flares. The result is a net reduction equivalent to 63% in CO2 emissions over 20 years.

Bitcoin mining currently avoids the emission of 841,216 tons of CO2 into the atmosphere each year. Bitcoin could even go carbon negative, as miners take to oil and gas drilling rigs.

According to satellite data, each year, more than 150 billion cubic meters of methane are burned in flares. That is enough to cancel 14 times the current Bitcoin’s carbon footprint.

Efficiency and Fading Clauses

Bitcoin’s energy consumption has only increased by 25% despite a 45% increase in hashrate year over year. This difference is explained by the 16% increase in the efficiency of the machine fleet that ensure the network.

ASICS efficiency has increased by 5,800% within an eight-year timeframe. The Bitcoin network spends an average of 46 joules to generate a trillion hashes. The best machines have an efficiency of 21.5 J/TH.

The BMC estimates that this efficiency will further divide by 24 over the next eight years.

It is worth noting the addition of a new section in the report on suppression clauses. That is clauses that force miners to stop their machines on demand. Currently, 2.5 GW of power can be returned to the grid during peak electricity consumption.

In total, 14 BMC member miners returned 1,280 GWh in 2022 alone, and probably more, given that BMC miners only account for half of the global hashrate.

This power subject to load shedding mainly affects North America (2.1 GW). It can be compared to a battery increasing the number of energy storage units installed in the United States and Canada (8.3 GW) by 25%.

The exodus from Kazakhstan

Kazakhstan was, in October 2021, the nation that hosted the second-largest global hashrate (18%). However, in January 2022, it had already fallen to 13% and now represents only 6.4%.

This development is extremely important given that 88% of Kazakhstan’s electricity comes from the combustion of fossil fuels. In other words, this exodus has necessarily reduced Bitcoin’s carbon footprint.

This is more than what the BMC reports since this organization assumes that the energy mix of non-BMC miners (50%) is similar to that of the United States. Therefore, the Bitcoin network may be closer to 65% green energy than 60%.

According to Daniel Batten, a ClimateTech investor, author, analyst, and environmental campaigner, the network should see its share of green energy increase by 4% each year over the next three years.

By Audy Castaneda

Five Top News: Third Week of January 2023

Audy Castañeda
-
0
<strong>Five Top News: Third Week of January 2023</strong>

This is an overview of the most important events around Bitcoin, Ethereum, and others.

Germany and the US take down hacking ring, Flat EU crypto taxes discussed, and possible NFT debut on Amazon: these are some of the top crypto news of the week.

Hive: Germany and the US Manage to Attack Hacker Network

German and American authorities were able to locate one of the largest hacker networks in the world. After a cyberattack, the hacker collective often demanded ransom demands in the form of cryptocurrency. The researchers estimate that the resulting damage could be “in the billions.”

The decisive clue came from Esslingen in Baden-Württemberg, where the authorities managed to secure “data and accounts of the network and its users,” explains the Stuttgart prosecutor’s office.

The hacker network is said to be responsible for more than 1,500 serious cyberattacks on companies and organizations, including 70 German companies. Hive is said to have stolen more than 100 million US dollars.

Ethereum: Test Update for Shanghai Started Successfully

The “Shanghai” hard fork is intended to allow users to access their connected ethers on the network. These are still “closed” due to the Ethereum merger. In preparation for the hard fork, a first test update has now been successfully carried out. Meanwhile, Shanghai is scheduled to officially take place in March.

FTX: $700 Million Seized from Sam Bankman-Fried

There is news regarding the FTX Cause. While court documents indicate that $700 million related to FTX has been seized, the crypto exchange’s bankruptcy trustees released a list of creditors. The juicy stuff: Big brands like Netflix, Apple, and Google have also been hit by the FTX crash.

Likewise, numerous companies in the crypto industry can be found in the list that has now been published. In addition to Coinbase, Binance Capital Management, Chainalysis, as well as Yuga Labs and Silvergate Bank, are said to be affected by the FTX collapse.

Amazon: Possible NFT Debut of the Online Giant

The US news magazine Blockworks reports that the e-commerce giant wants to get into the NFT business. A separate initiative is to be launched in the spring. The article refers to a total of four anonymous sources. They claim that Amazon has requested digital collectibles from some players in the crypto industry. It remains to be seen whether or not it will actually be implemented.

Regulation: Will There Be Uniform Crypto Taxes in the EU Any Time Soon?

The European Parliament published a draft that provides for the introduction of uniform crypto taxes on Bitcoin and other crypto currencies, for all member countries. This could be implemented in an EU-wide capital gains tax. However, taxes could be due not only on profits, but also on transactions, mining or trading crypto assets.

By Audy Castaneda

Web3 Startups Need “Strong Founders,” Accelerators Say

Audy Castañeda
-
0
<strong>Web3 Startups Need “Strong Founders,” Accelerators Say</strong>

For multiple accelerators, the common theme is clear: resiliency, emotional intelligence, and an understanding of the broader ecosystem are traits founders must have.

Running a startup in the Web 3.0 world, with its layers of technical knowledge, rapidly evolving ecosystem, and ever-changing demands from regulators, is certainly significantly difficult. That’s often where accelerators come in.

Most accelerators bring with them opportunities for networking, marketing and PR experience, as well as a contact book to help establish the projects in the broader ecosystem. Their presence is especially important in technology, where rapid growth and strong fundamentals can make or break a project in its early days.

Elnaz Sarraf, founder and CEO of Roybi Robot and Roybiverse, has certainly found them useful. In 2019, Roybi Robot, an intelligent toy robot designed to help young children learn multiple languages ​​and STEM skills, was featured on the cover of TIME Magazine as one of the Top 100 Inventions of the Year in Education.

Accelerators Can Break Down the Doors to Web 3.0

In the wake of that success, Sarraf and her team had their eyes on the horizon, and Web 3.0 was rising to the top.

“We always wanted to be one of the first companies to introduce new technologies to the industry,” she says. “But also, the education sector is very traditional. I remember talking to a couple of investors about Web 3.0 and Blockchain, and they looked at me as if I were a completely crazy person.”

Sarraf and the team cold-approached Matterblock, whose founders had been working in the space for several years. For them, deciding whether or not to participate in a project is largely based on dedication, IQ and EQ (intelligence and emotional quotient), says Zia Word, one of the two co-founders.

Sarraf and her praise are a bit of an outlier: “I’ve been told that for many Web 3.0 startups, many processes need to be reconfigured or scrapped altogether,” Zia says. “In traditional startups, you have things like MVP (minimum viable product), which is to test whether or not what you’re building is really necessary.”

Web3 Startups Work a Little Differently

A replacement for that is community building, a modus operandi that has characterized many pre-launch Web 3.0 startups. “It’s hard in Web 3.0 because you’re often creating new categories or building new technologies.”

In multiple conversations with BeInCrypto, the emphasis on founder quality was a recurring theme. Above all else, project managers need mental toughness, coachability, as well as an execution-focused mindset, says Nathalie Oestmann, COO of Outlier Ventures, “founders who don’t embody these traits are ultimately the ones who experience the biggest startup problems.”

“Being the founder of a startup is an incredibly tumultuous journey, and there is a constant need to change plans and make adjustments at any stage of this process,” Oestmann continues. The most successful founders are those who are open to receiving advice, learning, and adjusting. Above all, the strength of both founders and their teams is often more important than the idea, especially because startups early stages are the hardest.

By Audy Castaneda

1...567568569...1,654Page 568 of 1,654